Industry: United States Portable Power IndustryThe acquisition of Duracell was considered a smart move. Analysts, shareholders, managers expected a lot from this merger. Unfortunately, this acquisition created several problems for Gillette since their main goal of maximizing profits was not achieved. Main issues: • Should Gillette divest Duracell? • Is Gillette using appropriate strategies to deal with large and small competitors? • Stock prices are significantly decreasingExternal AnalysisIndustry Structure• The dry cell battery industry generated $2.6 billion in domestic sales in the United States in 2000.• 75% of all alkaline battery sales were impulse purchases.• AA size batteries accounted for almost 50% of all sales.• The industry was very competitive and the big three players were constantly developing new products. • There were three main distribution channels for batteries: discounters, 52.5% of sales; pharmacies, 23.8% of sales; and supermarkets, and 23.7% of sales. Industry Trends • Alkaline batteries were a favorite among American consumers. • Due to the high percentage of impulse purchases, manufacturers must ensure they provide effective displays for batteries. A large number of sales depends on the effective display of retailers. • Retailers create their own private brands (manufactured by the same big players) Socio-cultural segment • In the United States, where time is money, people are always in a hurry. This probably explains why the high percentage of battery sales are impulse purchases. Additionally, American culture is very receptive to technological innovations, so more efficient batteries will be required. Economic segment...... middle of paper ......, since the company would be more competitive in terms of price and if it already has a well-established brand, it would be more difficult to gain share of market to these small competitors which are emerging, namely private brands, Sony, Kodak, Panasonic, etc.Annex1. RatiosFinancial ratios 2000 1999 1998 1997 GP MARGIN (%) 63.59 62.95 61.97 Operating margin (%) 16.27 22.80 19.30 ROS (%) 4.22 13.76 11.75 ROA (%) 3.77 10.69 9.08ROE (%) 20.37 41.18 23.79PRICE/EARNINGS RATIO 94.59 35.09 44.27CURRENT RATIO 0.86 1.39 1.56 1.78DEBT TO EQUITY RATIO 4.41 2.85 1.62 1.242. Debt to Equity AnalysisYear Total Liabilities Total Equity Debt to Equity Ratio1997 6,023 4,841 1.2441644291998 7,359 4,543 1.6198547221999 8,726 3,060 2.8516339872000 8,478 1,924 4.406444906